U.S.: In Connecticut, Personal Income Growth Stalled In 2016

Brad Horrigan/The Hartford Courant

Shoppers at Westfarms mall take a break from bargain hunting to stop at Starbucks. Personal income for Connecticut residents rose just 1.2 percent in 2016, nearly half the U.S. rate, the federal government reported Thursday.

Shoppers at Westfarms mall take a break from bargain hunting to stop at Starbucks. Personal income for Connecticut residents rose just 1.2 percent in 2016, nearly half the U.S. rate, the federal government reported Thursday. (Brad Horrigan/The Hartford Courant)

In 2016, before U.S. economic growth began to pick up speed, Connecticut residents nearly stood still in the race for higher incomes, the U.S. Department of Commerce reported Thursday.

Real personal income, calculated as pay, investment income and other sources of income after accounting for inflation’s impact on purchasing power, rose 0.1 percent for Connecticut in 2016 over the previous year.

It was among the smallest increases in the United States, which posted a 1.1 percent rise, and the slowest growing in New England. In Maine, personal income grew the fastest in the six-state region, at 2.2 percent.

With the U.S. rate 11 times faster than Connecticut’s and Maine’s personal income jumping 20 times Connecticut’s rate, “What the heck is going on here?” said Peter Gioia, the economist for the Connecticut Business and Industry Association.

The bad economic news is linked to other recently released statistics highlighting Connecticut’s lethargic economy, he said. The state Department of Labor reported Thurday that Connecticut employers cut 1,400 jobs in April and the U.S. Commerce Department said earlier this month that the state ranks No. 49 in economic growth.

“All these things are tied in ultimately,” Gioia said.

Real personal income per person rose slightly faster, by 0.3 percent, to $57,554 in 2016.

For Connecticut, real personal income in 2016 was $206.5 billion, the second largest in New England, after Massachusetts. Nationally, real personal income was $14.2 trillion.

Nationally, the percent change in real state personal income ranged from 3.3 percent in Utah and Georgia to -3.6 percent in Wyoming.

Mark LeClair, a professor of economics at Fairfield University, said Connecticut is undermined by “sustained higher unemployment,” including loss of insurance jobs through outsourcing and telecommuting. The state’s unemployment rate in April was 4.5 percent, more than a half-percentage point higher than the U.S. rate of 3.9 percent.

He also blamed the unending fiscal troubles that face Gov. Dannel P. Malloy and the legislature.

“It does not help what’s going on in Hartford,” LeClair said. “The continuing inability to deal with the budget is scaring off companies.”

Gioia said states that do not have fiscal problems are “doing great.”

“Boston is capitalizing on Cambridge, the high tech sector, the high end financial sector and has eaten our lunch,” he said. “It’s not a Northeast thing. It’s a Connecticut thing.”

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